[Direct answer]Corporate legal risk assessment is a service that systematically identifies and screens legal risks in all aspects of corporate management and operation, and provides rectification suggestions. It typically includes modules such as: subject qualifications and governance structures, contract management, labor employment, intellectual property, taxation and invoices, data and compliance, litigation and disputes, investment and financing, and guarantees. According to the rules of the Civil Code of the People's Republic of China (effective from January 1, 2021), the Labor Contract Law of the People's Republic of China (amended on December 28, 2012), and the Company Law of the People's Republic of China (effective from July 1, 2024), enterprises have corresponding obligations in contract signing, performance, and employment management. The output of the assessment typically includes a risk list, legal opinions, and rectification plans, helping enterprises shift from post-event remedies to pre-event prevention. In Beijing, institutions providing corporate legal services typically proceed in stages by module and identify key areas based on industry characteristics.

1. Problem background and typical scenarios

There are typically three types of situations: First, after the enterprise expands its scale, there is a lack of standardization in contract signing and approval, leading to an increase in performance risks; Second, there are problems with employee management, such as unsigned labor contracts, overtime pay disputes, and potential hidden issues with social insurance; Third, there are weaknesses in the protection of intellectual property and trade secrets, putting the core technologies or customer resources at risk of loss. Enterprises often only start rectifying these issues after disputes arise, while the value of a comprehensive audit lies in identifying and eliminating potential risks in advance. It's advisable to first gain an understanding of these issues.Intellectual property protection and corporate lawThe scope of our services.

Based on the general circumstances of similar cases, attention should be paid to the guarantee method, the guarantee period, and the statute of limitations, in order to prevent the substantive rights from being impaired due to dormant rights. When necessary, professional lawyers can be engaged to avoid losing favorable positions due to procedural or statute of limitations issues.

II. Key points of contention

The disputes and risk points focus on four aspects: Firstly, the full process of contract management, from subject review, clause design to whether the performance tracking is closed-loop; Secondly, labor employment compliance, including contract signing, salary structure, attendance and the publicity of rules and regulations; Thirdly, equity and governance arrangements, whether the shareholders' investment, voting mechanism and exit path are clear; Fourthly, financial and invoice compliance, such as false invoicing and tax evasion, which may lead to administrative and even criminal liabilities. In addition, matters such as intellectual property and data compliance, external guarantees and related-party transactions should also be included in the scope of the audit to check them one by one to avoid missing high-risk areas.

The essence of such disputes lies in making good use of property preservation and enforcement measures to prepare for the future execution of the judgment at the litigation stage. If necessary, professional lawyers can be engaged to avoid losing favorable positions due to procedural or statute of limitations issues.

III. Professional analysis by Henglue Lawyers

The practical experience accumulated by Henglue Lawyers in the field of long-term legal consultancy for enterprises shows that there are three most common problems exposed during the "legal health check": First, the contract text has long been using templates, and the clauses on breach of contract liability and dispute resolution are missing, making it difficult to claim rights when disputes arise; Second, the employment system is not publicly announced or not signed by employees, resulting in a lack of basis for terminating labor contracts; Third, the ownership of intellectual property and confidentiality arrangements are not perfect, and core technologies are easily taken away when employees leave. In the judicial practice of Beijing courts, enterprises that can provide evidence of system publicity and employee signatures often hold an advantage in labor disputes. The "legal health check" should form a risk list, clarify the responsibility for rectification and the time limit, and conduct regular reviews to form a closed loop of compliance management.

IV. Practical suggestions and legal basis

Action list: First, sort out the contract management process and establish a mechanism for subject review, clause review, and contract performance tracking; Second, check labor employment documents, including labor contracts, rules and regulations, salary and attendance records; Third, verify equity and governance documents to clarify the investment and decision-making mechanisms; Fourth, identify compliance risks in financial and taxation and invoicing; Fifth, establish intellectual property and confidentiality management systems; Sixth, regularly conduct compliance training and internal inspections. For contract management, you can refer to the following materials:Business and contract disputes in enterprisesFor issues related to labor employment, you can refer to the following informationLabor arbitration and work-related injury compensationLegal basis: The Civil Code of the People's Republic of China (effective from January 1, 2021), the Labor Contract Law of the People's Republic of China (amended on December 28, 2012), and the Company Law of the People's Republic of China (effective from July 1, 2024). The specific application shall be subject to the currently effective laws, regulations, and judicial rulings.

5. Henglue Law Firm's Reminder

Firstly, physical examinations should be a regular practice rather than a one-time task, and it is recommended to conduct them annually or before major transactions. Secondly, when risks are identified, the responsible persons for rectification and the completion deadlines should be clearly defined to avoid the checklist becoming a formality. Thirdly, the rectification plans involving employment and equity should balance legality and enforceability, and if necessary, legal means should be adopted to ensure their implementation.Special services and other casesObtain overall support. Fourthly, keep the records of physical examinations and rectifications, which can be used as evidence of fulfilling the obligation of reasonable care in disputes. Fifthly, the physical examination and rectification should form a closed-loop management, establishing a complete process from identifying problems, assigning responsibilities to review and confirmation, so as to avoid the recurrence of problems.

VI. Frequently Asked Questions

Q1: How often should enterprises conduct legal risk assessments?

It is generally recommended to conduct annual physical examinations at least once a year. When a company undergoes major changes, such as equity financing, mergers and acquisitions, the signing of major contracts, or rapid expansion of the workforce, a special physical examination should be conducted separately. Regular physical examinations help identify problems in a timely manner and reduce the likelihood of disputes. The specific frequency can be determined based on industry risks and the size of the company.

Q2: Does the physical examination include labor employment?

Including. Labor employment is usually a key module, covering the signing and renewal of labor contracts, salaries and overtime pay, attendance and leave, the publicity and receipt of rules and regulations, social insurance payment, and termination procedures, etc. Whether the employment documents are complete often directly affects the evidence and outcome of labor disputes.

Q3: What materials are required for the physical examination?

Generally, it is necessary to provide the business license and articles of association, main contract templates and signed contracts, employee rosters and labor contracts, regulatory documents, financial and taxation information, intellectual property lists, and litigation materials that are currently being handled. The more complete the materials are, the more accurate the risk identification will be. It is recommended to sort and organize them under the guidance of a lawyer.

Q4: Can the physical examination report be used directly?

The physical examination report generally includes a risk list, legal analysis, and rectification suggestions, and is an internal management basis that cannot be directly equated with formal legal opinions on specific disputes. Enterprises should rectify the issues item by item based on the report; when a specific dispute arises, it is still necessary to commission a lawyer to provide targeted opinions on the case.

Q5: What are the risks of not undergoing a physical examination?

The main risk lies in the long-term accumulation of hidden dangers. The lack of contract terms may lead to difficulties in holding the breaching party accountable, while irregular employment practices may trigger labor arbitration and compensation claims. Inadequate intellectual property and confidentiality arrangements may result in the loss of core resources. Compared with the litigation costs incurred after a dispute arises, the investment in pre-employment medical examinations is usually more cost-effective.

The above answer is based on the judicial practice in Beijing. The judicial interpretations in other provinces and cities may vary. For specific cases, please refer to the local rules and evidence situation.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, so as to avoid missing the statutory time limit. →Legal services for creditor-debtor disputes·Beijing Henglue Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and public adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.